New Delhi, Dec 5 : Steep falls in demand for gold bonding wire in the electronics industry seen in recent years have begun to level off as observed in the third quarter (Q3) of 2017, a World Gold Council report said on Tuesday.
According to the report, from 2005 to 2011, the price of gold quadrupled which put microchip manufacturers under considerable pressure to limit the amount of gold used in their devices.
"The industry focussed on identifying materials suitable to replace gold entirely. Whilst this has had some effect on electroplated coatings, its impact has been most marked in the bonding wire market," said the report titled "Technology: a brighter outlook?"
It added that the gold prices, however, reached a point where manufacturers could not relieve the cost pressures by thrifting alone, and had to turn to substitution.
"Replacement and thrifting combined account for most of the 71-tonne fall in electronics demand from 2010-2016. But data to the end of Q3 2017 indicates we may see a slight recovery in demand by the end of the year," said the report.
"We believe the major fall in demand for gold in the electronics sector may be behind us. At the end of Q3 2017, we saw year-to-date demand growth for the first time since 2010, and there are some promising areas of recovery ahead," it added.
The WGC report said gold usage in electronics grew steadily from the early 1970s as electronic devices entered the mainstream, becoming ubiquitous in recent years as smartphones and tablets have taken an increasingly important role in peoples' lives.
"Demand for gold in the electronics sector peaked in 2010 at a record 327 tonnes. But the growth in electronics demand from 2000 coincided with a rapidly increasing gold price," the report noted.
"This had a considerable impact on the use of gold by the electronics sector; gold used in electronics fell to 256 tonnes in 2016," it said.
